What business expenses can New Zealand sole traders claim?

New Zealand sole traders can deduct any expense that is incurred in the course of earning taxable income, provided it is not private in nature. The key test from the Income Tax Act is that expenses must be 'incurred in deriving income' and must not be capital in nature. Commonly deductible expenses include: - Motor vehicle expenses (km rate or logbook method) - Home office costs (NZ$5/week flat rate or actual proportion) - Phone and internet (business proportion) - Professional fees (accountant, lawyer, tax agent) - Business insurance (public liability, professional indemnity) - Professional memberships and subscriptions - Equipment and tools costing NZ$1,000 or less (immediate write-off) - Advertising and marketing costs - Professional development and training directly related to your business - Bank charges and interest on business loans - Rent for business premises Expenses that are partly personal must be apportioned — only the business portion can be claimed.

• Must be incurred in deriving taxable income
• Cannot be private/personal expenses
• Mixed-use expenses: claim only the business proportion
• Capital expenses (over NZ$1,000): must be depreciated
• Low-value asset write-off: immediate deduction for items under NZ$1,000